Boeing Protesting

As discussed in class last week, Airbus was awarded a $35 billion Air Force contract to build aerial refueling planes. Today, the New York Times is reporting that Boeing will protest the awarding of the contract to its European competitor, Airbus. In the article, Boeing claims it was “treated unfairly.” Boeing was operating under the impression that they were “widely expected to win the contract,” however I would assume that the majority of companies bidding on contracts they have been previously awarded assume they will maintain their current contracts. The article references cost data and the size of the planes as factors that influenced the contract being awarded to Airbus. While there is mention of a closed door meeting in Washington with the Air Force and members of a subcommittee of the House Appropriations Committee to discuss confidential information involved in the bid, there is no mention of the potential security risk of contracting with a foreign company for equipment that will be used by the military. The events of 9-11 heightened public awareness for security breaches and increased the sensitivity of the American public. I believe the public may be uneasy about Airbus having access to airplane design models and building military vessels. However, the contract should be awarded to the company that produces the best product at the lowest cost, regardless of where the company originates.

http://www.nytimes.com/2008/03/11/business/worldbusiness/11boeing.html?_r=1&ref=business&oref=slogin